Bangkok--12 Jan--Fitch Ratings
Fitch Ratings has commented today in its latest special report entitled, "2010 Non-Japan Asia Structured Finance Outlook", that the majority of the collateral performance backing non-Japan Asia structured finance (SF) transactions is expected to be stable in 2010, as non-Japan Asian economies have continued to recover and outperformed most of the major advanced economies in the macroeconomic terms.
"Although affected by the economic downturn, non-Japan Asia SF transactions have performed relatively well compared to their US and European counterparts since the onset of the economic downturn in 2008," says Henry Hung, Associate Director in Fitch's non-Japan Asia SF team. "Given that the economies in the region are projected to continue to improve with relatively low and stable unemployment expectations for 2010, SF transactions, particularly in the consumer finance sector, are expected to benefit from the economic recovery; hence the expectation of stable rating performance in 2010," adds Mr. Hung.
Fitch currently monitors transactions with collateral in Korea, Singapore, Hong Kong, Taiwan and Thailand. Among these transactions, Korean transactions, which include RMBS, credit card ABS and auto loan ABS, have been the least affected during the economic downturn. Key transaction performance indicators, such as delinquency and default ratios, deteriorated to a limited extent within the agency's base case assumptions. With the robust economic outlook in 2010, these Korean transactions are expected to continue their stable rating performance.
Singapore properties backing Singapore CMBS transactions are still experiencing downward pressure on cash flow because corporate tenants are generally not in expansion mode, and market supply is expected to increase in 2010. However, Fitch expects Singapore CMBS transactions to have stable rating performance as these transactions can withstand a 20%-50% net cash flow decline before a rating downgrade might be considered. Two Singapore CMBS transactions, series 018 of Silver Maple and Orion Prime, are due for refinancing in 2010; the agency expects the refinancing risk for the transactions to be under control given the easing of credit market, the stable collateral performance and the REIT managers' capabilities to arrange financing ahead the transactions' expected maturity dates.
Fitch also covers the asset performance and rating Outlooks for SF transactions in Hong Kong, Taiwan and Thailand in the special report. Details of the individual sector outlooks can be found in the special report available on www.fitchratings.com.
Applicable Criteria available on Fitch's website at www.fitchratings.com: "Global Structured Finance Rating Criteria", dated 30 September 2009.
Contacts: Henry Hung, Taipei, +886 2 8175 7612; Stan Ho, Hong Kong, +852 2263 9668.
Media Relations: Karen Cho, Hong Kong, Tel: +852 2263 9935, Email:
[email protected]; Shivani Sundralingam, Singapore, Tel: + 65 6796 7215, Email:
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